What exactly President-elect Donald Trump's second term means for the stock market will be the question investors continue to grapple with in the week ahead. Nvidia earnings results will also be on deck as investors deal with stubbornly high interest rates as well. The postelection rally took a pause this week, with all three major averages headed for losses after a historic rally in the immediate aftermath of Trump's victory. The Dow Jones Industrial Average surged past 44,000 for the first time ever, and the S & P 500 and the Nasdaq Composite similarly posted new records. Nevertheless, all three benchmarks are now off their highs. Many remain optimistic the recent momentum can lift an expensive equity market still higher straight through the rest of the year, and possibly right up to Inauguration Day. But investors are trying to understand what happens after the president-elect is sworn into office, seeking clarity on a number of campaign promises including tax cuts and tariffs that could spur domestic economic growth but aggravate inflation, and potentially upend markets in the process. "The real heavy lifting starts after [Inauguration Day], at which time, I think, the market will probably start to get bumpier," said Jimmy Chang, chief investment officer at Rockefeller Global Family Office. On Friday, the three major averages were more than 2% off their record, each. The 10-year Treasury yield jumped back to around 4.5%, after being lower for much of the week. .SPX 5D mountain S & P 500 Nvidia's 'insane' demand Nvidia reports next week, with expectations running high into the print, especially after CEO Jensen Huang told CNBC's "Closing Bell: Overtime" last month that demand for the Blackwell AI chips is "insane" — a term the chief executive is unlikely to throw around lightly. Indeed, what will matter most to investors is not a beat in expectations for the October quarter, but what management can share about demand for its chips ahead of its product launches. Sales of Blackwell and Grace Blackwell are expected to start to show up in results next year. Harsh Kumar, senior research analyst at Piper Sandler, said he is bullish on the stock, and anticipates having to hike his price target significantly in the coming year. His current price target of $175 on the stock is about 19% above where Nvidia closed Thursday. NVDA 3M mountain Nvidia, 3 months "The build up for the Blackwell is what matters in the minds of people," Kumar said. "Blackwell will be missing in October. It will show up in January at a constrained level, and then it will really show up as Blackwell and Grace Blackwell starting the April timeframe. And I would agree that the backlog should be insane. I would agree with Jensen's comment." "[I'm] expecting Jensen to say something around the lines, ... that we'll be sold out for all of 2025," Kumar said. 'A new sheriff in town' For investors, the new administration could have more sway over how they invest going forward, given the potential changes that could come from a raft of nominees to key government appointments this week. For example, vaccine maker stocks slid Thursday after President-elect Donald Trump said he would nominate Robert F. Kennedy Jr., a vaccine skeptic, as secretary of the Health and Human Services Department. Shares of Moderna closed down more than 5%, while Novavax dropped more than 7% on Thursday. The development has Ken Mahoney, CEO of Mahoney Asset Management, steering clear of pharmaceuticals, which he expects will have the "weight of the government on top of them." "You might as well not get stuck in an industry which may get stuck with more regulation, or, you know, a new sheriff in town, so to speak," said Ken Mahoney. "We would definitely stay away from those." Conversely, the investor said he's positive on banks, another beneficiary of the Trump trade. The SPDR S & P Regional Banking ETF has surged 11% this month. "There's definitely winners and losers here," Mahoney said. Rockefeller's Chang said something similar: "While we are fundamental investors — a lot of people say they just focus on the companies, right? — you actually have to pay more attention to policies, because I do think they matter in an era of fiscal dominance." The interest rate outlook Investors are growing concerned about the interest rate outlook. While the Federal Reserve's most recent dot plot shows the overnight lending rate will fall to 3.4% at the end of 2025 — down more than one full percentage point from 4.50% to 4.75% where it currently stands — some recent economic signals, and the return of Trump to the White House, complicates the path forward. For starters, the latest consumer and producer prices reports indicate the last mile in getting pricing pressures down to the Fed's 2% target could be more challenging than previously anticipated, though the overall trend remains to the downside. And, Trump's threat to slap a 10% tariff across all imported goods — and at least a 60% tax on China — could trigger a global trade war that could reignite inflation. "The economy is not slowing down and core inflation is not cooling down, and with the threat of import tariffs from the new administration in the year ahead, this is a recipe for disaster where the deflation trend in core commodities prices could turn around in a heartbeat," Chris Rupkey, chief economist at FWDBONDS, wrote this week. Already, investors are recalibrating their expectations, with markets last pricing in a scenario where the overnight lending rate ends 2025 in the range of 3.75% to 4.00%, reflecting fewer than four quarter-point cuts from here, according to the CME FedWatch Tool. That could mean pressure in the bond market, which investors are already carefully monitoring. Some expect a retest of 5% in the 10-year U.S. Treasury yield, which was last hovering around 4.5%, could pressure equities, and lead to a pullback in the stock market. This week, Treasury yields spiked after Chair Jerome Powell said he is not in a hurry to bring interest rates down, given the strength of the U.S. economy. Week ahead calendar All times ET. Monday Nov. 18 10 a.m. NAHB Housing Market Index (November) Tuesday Nov. 19 8:30 a.m. Building Permits preliminary (October) 8:30 a.m. Housing Starts (October) Earnings: Walmart , Lowe's Companies Wednesday Nov. 20 No notable events Earnings: Nvidia, Palo Alto Networks , TJX , Target Thursday Nov. 21 8:30 a.m. Continuing Jobless Claims (11/09) 8:30 a.m. Initial Claims (11/16) 8:30 a.m. Philadelphia Fed Index (November) 10 a.m. Existing Home Sales (October) 10 a.m. Leading Indicators (October) 11 a.m. Kansas City Fed Manufacturing Index (November) Earnings: Ross Stores , Intuit, Deere Friday Nov. 22 9:45 a.m. PMI Composite preliminary (November) 9:45 a.m. S & P PMI Manufacturing (November) 9:45 a.m. S & P PMI Services (November) 10 a.m. Michigan Sentiment final (November)
